iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
22,274 Blog Posts

RENEWED COLLAPSE; FULL ROUT IN COMMDOITY STOCKS UNDERWAY

The losses in commodity stocks this past month is nothing short of staggering. We have seen this before and I’d be lying to you if this wasn’t reminiscent of the great bubble collapse of 2008, where we bore witness to oil collapsing from $140 into the $30s in short order thanks to a global collapse of economic activity.

Here are some notable losses in commodity names the past month:

XOM -18%, SHEL -22%, COP -31%, RIO -25%, DE -21%, VALE -27%, FCX -36%, CNQ -29%, EOG -31%, NUE -19%, FANG -30%, MOS -28%, TECK -40%, CRK -47%, X -32%, CLF -35%, BTU -28%

You get the drift.

One would surmise these losses would abate soon.

Let’s look at DE for example.

April -9.2%
May -5.2%
June -16.3%
July to date: -4.2%

Great names have been taken to the woodshed, all due to various reasons. The primary one is America hitching itself to the losing Ukraine. Let me repeat it: we are hitching ourselves to a sure loser in a war against a world power that is gaining allies on a daily basis and the world is becoming more and more bifurcated between the liberal world order and something opposite to that effect.

Just this afternoon “the west” declared they might affix a price cap of $40-60 on Russian crude. Are they so crazy that they believe this would be accepted by Russia?

Nevertheless, I am tempted to buy commodity dips here, but would prefer to begin adding late in the afternoon. I already own OXY, hedged with UVIX. I am likely to compile a short list of stocks for ownership by the session end. My goal is to have a high sharpe on my portfolio management and avoid large drawdowns. To do this I avoid intra-day swings by being in cash and only get aggressive in the late afternoon, but never without hedges.

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4 comments

  1. purdy

    It is comforting when commodities are trending up and Gates is buying farmland, as it indicates that they’ll keep us eaters around for a while longer.

    Maybe they’ve changed their mind.

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  2. soupbone

    The messaging is: these are economically sensitive investments and the cycle is ended, now sell! But if oil is all that useless in a downturn why all the fuss about oil now then? And what sort of downturn is being contemplated anyway? The trip to zero dollars will never be forgotten by the shale industry and Wall St also; that part of over-supply won’t repeat. Sorry Joe. The orange fella carried that oil price lucky charm in his back pocket (Trump was also quite inflationary behaved if I don’t mis-recall).

    Tempted to add to oil and gas maybe tomorrow…

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  3. roguewave

    CZ started Binance with$15 mill 5+ years ago. Today he’s a billionaire.
    Binance is hiring 2,000 people today. They have 10 years of cash available to maintain the company. https://www.youtube.com/watch?v=lldGpGsUcWw start at 4 mins.

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